This report, the first in a proposed series, is a preliminary assessment of the strengths and vulnerabilities of the State Peace and Development Council (SPDC), the military regime ruling Burma/Myanmar. Its purpose is to provide essential background - not at this stage policy prescriptions - for policy makers addressing the prospects for non-violent democratic transition in the country and ways to achieve that transition.

Despite the international attention which Burma/Myanmar continues to attract, there are large and important gaps in publicly available information about the personalities who lead the SPDC, about the operations and state of the armed forces, and about the situation in many parts of the country and inside important groups, such as the students and the monks. A complete and reliable picture of the strengths and vulnerabilities of the SPDC will require a further major research effort.

But the outlines of that picture are reasonably clear: a regime which is presently very strong and comfortable in its resistance to internal and external pressures for change, but which is not totally invulnerable, particularly in terms of its capacity to maintain tight military control of the entire country.

The military government in Burma/Myanmar does presently appear to be as strong as at any time in the country’s history. It controls all public aspects of the country’s political life and important parts of the private sector economy. It has put in place all of the institutional means, including a robust and well-organised domestic intelligence apparatus, needed to ensure the continuity of military rule. It is showing no weakening in its determination to hold on to power.

The modernisation of the armed forces since 1989 has delivered the regime unprecedented military successes against ethnic insurgencies. Over the decade, the government has brokered ceasefire agreements with seventeen of its former foes, including the most powerful narco-armies, such as the United Wa State Army (UWSA). The regime partially opened up Burma/Myanmar’s economy after 1988 prompting new levels of foreign direct investment, particularly in the oil and gas sector, into the early 1990s. The country has achieved positive economic growth through the whole of the last decade at the national level, though this has been from a low base and is probably not as high as the reported average annual GDP growth of about 5 per cent. The drug trade has become a significant factor in the overall economy and the regime has obtained vital revenue from reinvestment of narcotics profits.

Despite its considerable strength, the regime’s stranglehold on power does have some vulnerabilities, the most important of which may lie within the armed forces – precisely that part of the Burmese governing order about which the outside world knows least. The most significant vulnerability here is simply overstretch. The more extended the military’s reach has become in areas previously controlled by ethnic insurgents, the more vulnerable the regime’s control becomes, and it is questionable whether it has the sophistication, capacity and management tools to make and implement the necessary fine judgments about how far to extend its operations. There is already some evidence that the regime cannot feed its soldiers in the far-flung outposts. A four-fold salary increase for the armed forces reported in April 2000 is another suggested pointer to the scale of the problem.

The ethnic armies, although most of them for the moment are not fighting SPDC forces, will remain a potential threat if only because they retain all their weapons. These groups are significantly weaker and somewhat more demoralised than ever before, but the ceasefires were not exclusively the result of military defeat at the hands of government forces. The SPDC regime had to make promises to secure the agreements, such as offering a role in drafting a new Constitution, and these will need to be kept if the regime is to continue to reap the political gains from the ceasefires.

There is no doubt that popular discontent in Burma/Myanmar is profound, with regime success coming at the cost of sustained brutalisation of the civil population, including forced labour and forced migration. But it is unclear just how politically focused the discontent is, and whether or in what ways it could threaten the SPDC. The political opposition, primarily the National League for Democracy (NLD), continues to mount a challenge to the legitimacy of the military regime and will remain an important irritant to it. But the NLD’s points of leverage inside the country for weakening the SPDC’s grip on power are few, and it is difficult to be optimistic about it achieving change in the near term.

Internationally, the SPDC is in a strong position. It has major allies, particularly China, which has been supplying it with military equipment in large amounts. Its other neighbours (ASEAN countries and India) and some near-neighbours (Taiwan and Hong Kong) have been expanding relations with it. Burma/Myanmar has been denied bilateral military sales and multilateral economic aid from most developed countries, and these and other sanctions do at least continue to register the moral and political unacceptability of the regime. The robust role of the International Labour Organisation (ILO) in investigating and condemning forced labour, and likely follow up moves by other UN agencies, will also help ensure that the SPDC’s position remains a subject of considerable international political contest. But actual and threatened sanctions, and other forms of international isolation, have so far done little to undermine the regime's survival.

The challenge for the international community is to find ways - having regard to the regime's apparent strengths and vulnerabilities - to intensify the pressure upon it to accommodate peaceful democratic transition. A crucial related issue is how, in achieving that transition, to support the democratic opposition forces within the country in ways that are not counterproductive. Future reports by ICG will seek to address these issues.